1. A REPORT
ON
STUDY ON CONCEPT OF SERVICE TAX
IN B.S.P
Prepared By
JAYA DESHMUKH
BHILAI STEEL PLANT
(Year 2016-2017)
A report is submitted in partial fulfillment of
the requirement of
2 Year Fulltime Master of Commerce
(M.Com.) at
SHRI SHANKARACHARYA MAHAVIDYALAYA
JUNWANI,BHILAI (CHHATTISGARH)
Submitted to: Guided by:
Dr.Seema Jaiswal Mr.ABHISHEK KOCHAR
2. ACKNOWLEDGEMENT
It gives me immense pleasure to convey my heartfelt appreciation to the
institution. I sincerely thank for providing me with adequate knowledge to take on
this complex but interesting task.
I am grateful towards the management of Bhilai Steel Plant for providing me this
opportunity to carry out analysis of one of its ambitious projects. I would like to
thank the management and the staff of Bhilai Steel Plant for their guidance and
co-operation which they had extended over the entire duration of my project.
I would render my sincere thanks to Mr. ABHISHEK KOCHAR(Junior Managrer)
who have been extremely helpful and co-operative to share with me information
and time which I understand was extremely difficult. I would also extend my
deepest gratitude and sincere thanks to Mr. G.V.RAO (DGM Finance AND
Accounts) for his kind co-operation and help during the progress of the project.
I also pay my deep gratitude and sincere thanks to Mr. S.K. MARATHE (Training
Co-ordinator, HRD) who provided able guidance and ensured uninterrupted
training throughout the course of the project.
Finally, I would not be able to finish my report without the support of my parents,
friends and my co-trainees in BSP. I thank them from the core of my heart.
JAYA DESHMUKH
3. DECLARATION
I am Reshma student of SSMV JUNWANI for the session FW-2016-17, hereby
declare that, this project report is prepared, in lieu of a compulsory paper to be
submitted for the partial fulfillment of Master of Commerce , is my original work,
which I have submitted in Bhilai Steel Plant, to my guide Mr. ABHISHEK
KOCHAR.
All the information and data given in the project is authentic to the best of
my knowledge and taken from reliable sources.
Place: JAYA DESHMUKH
Date: SSMV
JUNWANI
4. CERTIFICATE
TO WHOM IT MAY CONCERN
This is to certify that Reshma student of SSMV JUNWANI has successfully
completed her project work on STUDY ON CONCEPT OF SERVICE TAX IN
B.S.P under my guidance during the month of 29 Feb to 26 march 2017. This
project has been undertaken by her for the partial fulfillment of academic
curriculum of Master of Commerce . I hereby declare that she has completed and
submitted this report up to my satisfaction.
I wish her a successful professional career.
Date:
Mr.ABHISHEK KOCHAR
Junior. Manager
(finance dept)
Place:
BHILAI STEEL PLANT
5. CONTENTS
Acknowledgement
1. Bhilai Steel Plant (BSP)………………………………………………………
1.1 Introduction………………………………………………………………………………..
1.2 Objectives…………………………………………………………………………………..
1.3 Product Profile……………………………………………………………………………
1.4 Product Mix ………………………………………………………………………………..
1.5 New Products………………………………………………………………………………..
1.6 Expansion & Modernization…………………………………………………………….
1.7 Major Project Activities at BSP………………………………………………………….
1.8 Organizational Structure………………………………………………………………….
1.9 SWOT Analysis ……………………………………………………………………………….
2. Finance & Accounts Department…………………………………………….
2.1 An Overview…………………………………………………………………………………..
2.2 Organizational Structure of F & A/C Department ……………………………..
3. Taxation in India
4. Service Tax
4.1 Introduction
4.2 Payment of service tax
4.3 Declared service
4.4 Negative list
4.5 Filling of return
4.6 Appeals
5. Conclusion…………………………………………………………………….
6.. Bibliography…………………………………………………………………
6.1 Websites………………………………………………………………………………
6.2 Books…………………………………………………………………………………..
6.3 References……………………………………………………………………………
7. BHILAI STEEL PLANT
THE BEGINNING:
This Leadership of free, India took a visionary decision to set up
integrated steel plants under the exclusive responsibility of the state
owing to the massive investment needed for creating additional Steel
capacity, which private industry would not be able to mobilize and the
cardinal role steel would play in rapid economic advancement as a
major step towards this goal, government of INDIA and USSR
entered into an agreement signed at New Delhi on 2nd
march 1955, for
the establishment of an integrated Iron and Steel works at Bhilai with
an initial capacity of one million tonnes of ingot steel.
The main consideration which responsible for setting up the plant at
Bhilai, was the availability of Iron ore at Delhi-Rajhara at a distance
of about 90 Km from the site limestone from Nandini at 22 km and
dolomite at HIRRI at 41 km. the plant was commissioned with the
inauguration of the first blast furnace by the then president of India.
Dr. Rajendra Prasad on 4th
Febraury 1959. The plant was soon
expanded to 2.5 Million tonnes in September 1967 and in further
expansion to 4 MT was completed in 1988. The main focus in the 4
MT stage was on the continuous casting unit and the plate mill, a new
technology in steel casting and shaping for any integrated steel plant
to India during those times.
THE ORGANIZATION:
Bhilai Steel Plant functions as a unit of SAIL with its corporate office
at New Delhi. SAIL is governed by a Board consisting of function
Directors, Managing Directors and government nominee Directors,
85.62% of the shares of SAIL are with Indian Government and
balance are with financial institutions, mutual funds, Indian Public
and others, corporate office formulate Policies, strategies and overall
guidelines for its unit, central organization like CMO ( Central
8. Marketing Organization ) RDCIS ( Research and Development Centre
for Iron & Steel ) CET ( Centre for engineering and Technology ) look
after the relevant activities for the plates under SAIL.
Over the years, Bhilai Steel Plant has developed an organizational
culture that run forces its commitment to values and stimulates
continuous improvements and higher levels of performance. the chief
executives at Bhilai is the Managing director (MD) who is in overall
control of the operations of the plant, township and the mines,
Managing Director is assisted by his DRO’S i.e. the functional heads
(Executive directors/General Manager) concept of Zonal heads and
HOD’S helps in integrating various functions with clear
accountability for achieving corporate vision, company goals and
objectives.
India 2020 – A vision for the new Millennium
“We still have a number of persons in our country in Steel authority of
India Limited (SAIL)……… They have the will to excel and transform
the country, given a long term vision”.
Dr. A.P.J. Abdul Kalam
BSP’s ORGANISATIONAL OBJECTIVES:
To encage customer satisfaction through:-
Improvement in productivity and product quality.
Skill enhancement of our people by competence commitment
and culture-building.
Production as per customer requirements.
QUALITY POLICY:
Attending market leadership through enhancing customer
satisfaction.
Achieving continual improvement in productivity, quality and
salability of our products.
Active involvement of all our people in achieving our goals,
9. objectives and target.
PRODUCT PROFILE:
Bhilai Steel Plant (BSP) has mainly three types of products:-
1. Semis Product
2. Long Products
3. Flat Products
BSP is one of the major producers of long steel products in India. The
current product mix of BSP comprises Plates, Rails, Heavy
Structurals, beams, channels, merchant products, bars, rods and light
structurals, wire rods and semis, like blooms and billets. Presently,
the long products constitute about 74% and flat products about 26%
of the saleable steel produced at BSP.
PRODUCT MIX OF BSP:
Rail & Structural Mill (Capacity - 7,50,000 T )
Products
Rails - R52 Kg/m & R60 Kg/m ; UTS 880 N/mm2 rails as per
IRST-12/96 specifications , Euronorms and international
standards.
Thick web asymmetric rail Zu 1-60
Beams - 600,500,450,400,350,300 & 250.
Channels - 400,300 & 250.
Angles - 200 & 150.
Crossing Sleeper.
Crane Rails - KP80, 100,120 & 140.
Bhilai is the sole supplier of the country's longest rail tracks of
260 metres.
Bhilai Rails
Largest producer and leading rail maker of the world.
Four and a half decades of experience in rail making.
Produced over 15 million tonnes of rails; 2.7 lakh km in length.
Indian Railways- World’s second largest rail company moves
10. exclusively on Bhilai rails.
Bhilai rails are subjected to world’s highest traffic density and
axle loads.
Rails exported to 10 countries with exports to South Korea, New
Zealand, Argentina, Turkey, Iran, Egypt, Ghana, Bangladesh
and Malaysia.
Technological Superiority
Steel from LD Converter – Ladle furnace - RH Degasser –
Comcast route; achieving world best level of degassing/refining
to less than 1.5 ppm of hydrogen in liquid steel in 100% of
heats.
Capability to produce as rolled lengths of 80 meter and welded
panels up to 260 meters
High degree of Straightness due to world’s most advanced and
Laser straightness measurement based end straightening
machine.
World class tested rails passing through state of art online NDT
equipment; Laser straightness measurement, Ultrasonic and
eddy current testing machines
Computer controlled automatic rail handling system and
automatic yard mapping for rail storage.
Computerized Rail Tracking system for collection and storage of
all process and testing related data of each rail.
Merchant Mill (Capacity - 5,00,000 Tonnes)
Products
Plain Rounds : dia 28, 32, 36,40, 50,53, 56, 63 & 67
TMT Bars : 25,28, 32, 36, 40 & 45
Lt. Structurals :Channel 100 x 50, 75 x 40
Angles : 50 x 50 x 5 upwards to 90 x 90 x 10
Wire Rod Mill (Capacity - 4,20,000 T)
Products
11. Wire Rods (Plain, Electrode Quality & TMT) in 5.5, 6, 7, 8 & 10
mm plain and ribbed, and 12 mm plain in coil form
8, 10, and 12 mm TMT
Product Mix: Saleable Steel Production:
2010 (Estimated)
FY: 2006-07
19.60%
10.20%
2.80%8.70%
6.70%
8%
24.10%
19.80%
SEMIS
ROUNDS/BARS
COATED PRODUCTS
CR COILS/SHEETS
STRUCCTURALS
RAILWAY MATERIALS
HR COILS/SHEETS
PLATES
Plate Mill (Capacity – 9, 50, 000 T)
(Plate thickness: 8-120mm, Width: 1500-3270mm, Length: 5-12.5 M)
23.30%
4.80%
10.40%
15%
7.40%
22.10%
16.40%
ROUNDS/BARS
COATEDPODUCTS
CRCOILS/SHEETS
STRUCTURALS
RAILWAYMATERIALS
HRCOILS/SHEETS
PLATES
12. The modern Plate Mill rolls out heavy and medium plates, as well as
those for pipe manufacturers. Plates of wide variety, in any required
size, and strength, chemical and physical properties, can be produced
here. It has capacity to produce high pressure, boiler quality and high
tensile steels. Shipbuilding plates, conforming to Lloyd’s
specifications, and pressure vessel boiler plates, conforming to
various ASTM, ASME standards, have withstood the challenges of
nature and time. Some of the unique features of the mill are on-line
finishing facilities and off-line normalizing facilities. Bhilai has the
widest plate mill in the country, and it uses continuously cast slabs as
input. Liquid steel produced under controlled conditions in the LD
Converters is rinsed with argon gas to homogenize the composition as
well as to remove non-metallic inclusions before continuous casting
so as to ensure the production of high quality feedstock for the Plate
Mill. As per customers' requirement or specifications, plates are
normalized in a roller hearth normalizing furnace.
NEW PRODUCTS:
To meet the customers’ requirements, increase the market
share and widen the product range, several new products have
been developed.
BS-1501-224 Grade 490A for mounded pressure vessels.
API 5L X-52/X-65 Plates for Line Pipe Applications.
High Tensile Plates BSEN-100025, S-355 K2G3 and BS4360 50
DD Specifications for export with sub-zero impact toughness,
thicker plates in boiler quality grade.
SAILMA 300 HI plates in 75 & 80 mm thickness were
developed for DLW, Varanasi, for application in locomotive
base plate.
DMR-249 A (ABA grade) plates with stringent toughness
requirement at sub-zero temperature was developed for
Defense Research Lab, Hyderabad.
Corrosion resistant Molybdenum rail (52 kg) was developed and
supplied to Railways.
Commercial production of Cu-Ni-Cr Plates for corrosion
resistant (with corrosion resistance index of 6 Min.)
applications has been successfully done for customers like
13. BHEL & TISCO.
Commercial production of 25 mm TMT- Fe 415 and TMT- HCR
500 bars at Merchant Mill. 950 mm High Tensile impact tested
IS 8500 Fe 540 B Plates were successfully rolled and supplied
for the first time.
63 mm High Tensile Plates of DIN 17100 St 52.3 were
successfully rolled and supplied for the first time.
API X-60 plates were developed in up to 3270 mm width in
thickness range of 14-22 mm for pipeline segment.
SAILMA 300 HI plates in 75 & 80 mm thickness were
developed for DLW, Varanasi for application in locomotive base
plate.
A new segment - Windmill Tower was identified in Non-
conventional Energy sector and supplies to the tune of 2500
T/month are being made to customers like L&T, ECC &
ATMASTCO.
Narrow width slabs in 180 mm thickness, in 205x290 size in
SWR 14 grade with specific chemistry, and Hy blooms in 205x
265 size and 205x325 size in SWR 14 grade were developed at
BBM for cycle manufacturers.
Besides, successful trial production of wire rods of EN-8 grade
high carbon steel, and Weather Resistant Cu-P Plates for
corrosion resistant applications has been done.
Lower tonnage orders of non-standard size plates with lower slab
weight are also being. Plates from Bhilai have been exported to
Europe, America, Middle East, and South East Asia from 1986.
EXPANSION AND MODERNISATION:
Presently total requirement of iron ore of BSP is met from Dalli
Rajhara, Iron Ore Complex. In view of fast depleting reserves at
Iron Ore Complex, Rajhara and to meet future requirement, BSP
has decided to open up an iron ore mine at Rowghat which is
located about 80 Kms from Rajhara in Narayanpur District of
Chhattisgarh. Accordingly, BSP will develop the mine in Block-A of
14. Deposit-F of Rowghat with a production capacity of 14.0 MT per
year wef 2011-12. Due to environmental reasons, the
beneficiation plant shall be of dry circuit type. However, grant of
forest clearance under Forest (Conservation) Act, 1980 is still
awaited. work of layings Railway line for Rajhara to Rawghat has
already been selected into by SECR.
MAJOR PROJECT ACTIVITIES AT BHILAI STEEL PLANT
SI.
NO.
Project Sanctio
ned/Est
im-ated
cost
Expected
Date of
Completio
n
1
2
3
4
5
6
7
8
New Slab Caster In SMS2 along with
Ladle Furnace & RH Degasser
Technological Up gradation of BF7
including GCP
Installation of 15MW Turbo generator
at P&BS
Replacement of strand 9, 10 and 12
with housing less stands in Merchant
Mill.
On line ultrasonic testing machine in
Plate Mill.
Rebuilding of Coke Oven Battery no 5
along with integrated coal chemical
facilities.
Modernization of B Strand Wire rod
Mill.
520.76
170.41
48.10
18.64
10.37
219.04
74.66
64.10
Sep-07
July-06
Feb-06
Sep-05
Sep-o5
Jan-07
Feb-06
July-06
15. 9
10
11
Hydraulic AGC, ATG & PV rolling in
Plate Mill.
Hot Metal Desulphurization unit in
SMS 2
Revamping of Sintering Plant-2
ERP Facilities
75.68
102.00
43.97
*
*
*
ORGANISATIONAL STRUCTIRE OF BHILAI STEEL PLANT
MANAGING DIRECTOR
GM(F&A)
GM (IT)
GM (M&SP)
GM (IA)
GM I/C
(MINES)
DIR (M&HS)
ACVO
COC
ED (PROJECTS)
GM (PROJECTS)
GM (PP&E & BEDB)
GM I/C (SERVICES)
GM (SAFETY)
GM I/C (M&U) (REFR)
GM (P MILL & MILLS-LP)
GM(CO,CCD & SP,OHP)
GM I/C (PE,EN & STEEL)
GM (QUALITY)
GM (CCS)- SMS-II
ED
(WORKS)
ED (P&A)
GM (TS)
GM (PERS)
GM (HRD)
GM (MS)
DGM (L & A)
ED (MM)
GM (MM)
16. SWOT Analysis
The primary function of Bhilai Steel Plant are derived from the
functions of the mother organization SAIL. As a production unit of
SAIL, BSP carries out the specific functions and task assign to it from
time to time, both with regards to production and execution of other
functions of SAIL, such as design consultancy, training and
development etc. The primary analysis of any organization begins
with the SWOT Analysis. It gives a complete picture so as to where an
organization stands with respect to its competitors
And areas where its lags behind. It also gives a bird eye view f the
possible opportunity that exists which can be capitalize upon the
threats that may affect its operations at present or in the future.
SWOT
Strengths:
Capacity of plant
Product Mix
Quality of Products
Human Resource & Management
Weakness:
Supply of Raw Materials
Demurrages
Rigidity of Labor Law compared to other countries
Opportunities:
Upsurge in Indian Economy
Technological Edge
Human Resource Management
17. Threats:
Effect of Custom Duty
International Competition
Domestic Competition
Increase in Oil Prices
Depleting Mines
AWARDS & ACCOLADE
Bhilai Steel Plant has excelled in all walks of life, be it
technology, quality, environment or socio-culture, some of the
prestigious awards bugged by BSP are as follows.
• Prime minister Trophy for best integrated steel plant in India
Won seven times science its inception in the year1992-93, 1993-
94, 1995-96, 1996-97, 1997-98, 2003-04 and 2004-05.
• National energy conservation award in the integrated steel
sector won for 1994,1996,1998 & 1999.
• IIM National Quality awards winners in ferrous category during
1995-96, 1997-98 and 1999-2000.
• BIS Rajiv Gandhi National Quality award won twice in recent
years.
• IOD Golden Peacock National Quality Award won therice in
recent year.
• INSAAN Award for employee suggestions six times in last Seven
year.
• SAIL paryawaran Award for all the six times (this ward was
given from 1992-93 til 1997-98), for best environmentally
managed Integreted Steel Plant. Several Paryawaran Awards
18. have been also been won by captive mines and SMS-1 of BSP.
• Indo- German Green Tech. Environment Excellent Award for
the year 1999-2000.
• Lal Bahadur shastri Memorial Award for the year 2000-01 for
“Best Pollution Control Implementation Gold Award”.
• Dalli mines has bigged National Safety Award for a record seven
times.
• National Award for best pay rolls the year 1999-2000 for
outstanding social work won by Bhilai savings group in public
sector for 1999-2000 and thrice earlier as best Sanchayika
Award.
• Washeshari Devi Bhatia memorial Charitable Trust Award for
Mahila Samaj.
• Steel ministers Trophy for the longest accident free period
during 1995 -96 in the integrated steel plant category.
• BTI adjudged the best Training Establishment in northern zone
by all India Regional Council several times.
• Padam Bhushan – Awarded to smt. Teejan Bai, Pandwani
Singer.
• Prime Minister’s Shram Awards since inception of the
award(1985)- Total 25 won as follows:-
Shram Ratan : 08
Shram Bhushan : 09
Shram vir : 04
19. Shram Shri : 04
Vishwakarma Rastriya puruskar :
188
Arjun Award : 02
• Apart from above, numbers individual group awards have been
won time by BSP employees at National level in the field of
Quality Circles, Management , Metallurgy, Sport & Cultural
Activities etc.
20. FINANCE &
ACCOUNTS
DEPARTMENT
2. FINANCE AND ACCOUNTS DEPARTMENT
An Overview:
For any organization, the Finance & Accounts function plays a key
role in guiding the organization to meet its ultimate goals and
objectives. While Finance function embarks upon regulating the
inflow and outflow of funds, the Accounts function basically
supports the finance function by way of analyzing the transaction in
a most befitting manner. Finance & Accounts function is like a
21. mirror through which one can peep into the health of an
organization.
Finance & Accounts Department of BSP has to execute several
activities. The Department has been divided into several sections
based on organizational needs and functional expertise required by
grouping activities of similar nature as a section. The objective of
Department is always to meet the requirements of Line
Departments, customers, suppliers, stakeholders and Government
Departments while discharging its own functions such as
accounting, budgetary control, rendering advice on financial
matters and meeting the statutory requirements. To back up all
above functions, the Department has a vast and dedicated team of
professional accountants and experts.
The entire department is represented by the following sections -
Cash & Bank
Central Accounts & Assets Accounts
Central Excise & Service Tax
Contract Concurrence
Contributory Provident Fund (CPF)
Cost Accounting & Energy Cell
Final Claim Cell (FCC)
Finance Co-ordination & Administration
Freight & Claims
Import Accounts
Incentive Cell
Management Accounting
Medical Accounts
Mines-Rajhara, Nandini, Hirri
Operation Accounts
Operation Budget
Project Finance & Accounts
Purchase Concurrence
Raw Material Accounts
Rent Cell
Sales Accounting
Sales Invoicing and Central Freight
22. Sales Tax & Entry Tax
Stock Ledger (Stock valuation)
Stock Verification
Store Accounts
Store Bill Accounting
Store Bills
Township Accounts
Wages
Finance also discharges special functions such as taxation like Central
Excise, Sales Tax, VAT, CST, Entry Tax, and Terminal Tax.
ORGANISATIONAL STRUCTURE OF
FINANCE AND ACCOUNT DEPARTMENT OF BHILAI
STEEL PLANT
D.G.M.(F&A)
D.G.M.(F&A)
CFM CFM CFM
CFA
CASH, WAGES-I
WAGES-III A,
INCENTIVE CELL,
STORES, FIN.
ESTABLISHMENT
ADMINISATION &
COORDINATION
CENTRAL A/CS, MANAGEMENT
A/CS, ASSETS A/CS,
OPERATION BUDGET, COST A/CS,
ENERGY CELL,
OPERATION A/CS, PC, CC.
MINES, ZONAL
WAGES, WAGES
COORDINATION
RAW MATERIALS
A/C, FREIGHT &
CLAMS, STOCK
VERIFICATION,
TOWNSHIP
SERVICES,
HOSPITAL A/CS
PROJECT FINANCE,
CAPITAL BUDGET,
WORKS FINANCE
ZONAL A/CS & WORKS
COMPILATION
SALES, EXCISE,
SALES TAX, FRT.
OUTWARD
GM(F&A)
23. TAXATION IN INDIA
the Union Government, the State Governments and the Urban/Rural
Local Bodies. The power to levy taxes and duties is distributed
24. among the three tiers of Governments, in accordance with the
provisions of the Indian Constitution. The main taxes/duties that the
Union Government is empowered to levy are Income Tax (except tax
on agricultural income, which the State Governments can levy),
Customs duties, Central Excise and Sales Tax and Service Tax. The
principal taxes levied by the State Governments are Sales Tax (tax on
intra-State sale of goods), Stamp Duty (duty on transfer of property),
State Excise (duty on manufacture of alcohol), Land Revenue (levy on
land used for agricultural/non-agricultural purposes), Duty on
Entertainment and Tax on Professions & Callings. T he Local Bodies
are empowered to levy tax on properties (buildings, etc.), Octroi (tax
on entry of goods for use/consumption within areas of the Local
Bodies), Tax on Markets and Tax/User Charges for utilities like water
supply, drainage, etc.
Since 1991 tax system in India has under gone a radical change, in
line with liberal economic policy and WTO commitments of the
country. Some of the changes are:
• Reduction in customs and excise duties
• Lowering corporate Tax
• Widening of the tax base and toning up the tax
administration
WHAT IS TAX?
A tax is a compulsory charge or payment levied or imposed by a
public authority on an individual.
25. TYPES OF TAXES
1)DIRECT TAX
A tax which is paid by a person on whom it is legally imposed and
the burden of which cannot be shifted to any other person.
2)INDIRECT TAX
Indirect tax is imposed on one person but is paid partly or wholly
by others.
General Tax Incentives for Industries:
100% deduction of profits and gains for ten years is available in respect of the
following:
• Any enterprise carrying on the business of developing,
maintain ing and operating infrastructure facilities viz., roads,
highways, bridges, airports, ports, rail systems, industrial
towns, inland waterways, water supply projects, water
treatment systems, irrigation projects, sanitation and sewage
projects, solid waste management systems.
• Undertakings engaged in generation or generation and
distribution, transmission or distribution of power, which
commence these activities before 31.3.2006.
• Any company engaged in scientific and industrial research and
development activities, approved by the prescribed authority,
before 31.3.2003.
• Any undertaking which develops, operates, maintains an
Industrial Park or Special Economic Zone before 31.3.2006.
• Notified Industrial Undertakings set up in the North Eastern
region including seven north-eastern states and the state of
Sikkim.
26. • Undertakings developing and building housing projects
approved by the local authority before 31.3.2001and which are
completed before 31.3.2003.
• 100% deduction for seven years for undertakings
producing or refining mineral oil.
• 100% deduction from income for first five years and 30%
(for persons other than companies: 25%) in subsequent
five years is available in respect of the following:
o Company which starts providing
telecommunication services whether basic or
cellular including radio paging, domestic
satellite service, network or trunking, broad
band network and internet services before
31.3.2003.
o Industrial undertakings located in certain
specified industrially backward states and
districts.
o Undertakings which begin to operate cold
chain facilities for agricultural produce before
31.3.2003.
o Undertakings engaged in the business of
handling, storage, transportation of food
grains.
• 50% deduction for a period of five years is available to
undertakings engaged in the business of building,
owning and operating multiplex theatres or convention
centres constructed before 31.3.2005.
• Tax exemption of 100% on export profits for ten years
upto F.Y. 2009-10, for new industries located in EHTPs
and STPs and 100% Export Oriented Units. For units set
up in Special Economic Zones (SEZs), 100% deduction of
export income for first five years followed by 50% for next
two years, even beyond 2009-10.
• Tax exemption of 100% of Export profits for ten years for
27. new industries located in Integrated Infrastructure
Development Centres or Industrial Growth Centres of the
North Eastern Region.
• Deduction of 50% of export profits from the gross total
income. The deduction would be restricted to 30% for
financial year 2003-04 and no deduction is allowable
subsequently.
• Deduction from the gross total income of 50% of foreign
exchange earnings by hotels and tour operators. The
deduction would be restricted to 30% for financial year
2003-04 and no deduction is allowable subsequently.
• 50% deduction of export income due to export of
computer software or film software, television software,
music software, from the gross total income. The
deduction would be restricted to 30% for financial year
2003-04 and no deduction is allowable subsequently.
• Deduction in respect of certain inter-corporate dividends
to the extent of dividend declared.
• Exemption of any income by way of dividend, interest or
long term capital gains of an infrastructure capital fund or
an infrastructure capital company from investment made
by way of shares or long term finance in any enterprises
carrying on the business of developing, maintaining and
operating infrastructure facility.
SALES TAX
Central Sales Tax (CST).
When the sale is done between states ie inter state sale then central sales tax
is levied.
Local Sales Tax (LST) OR VAT
Where a sale takes place within a state, LST would be levied. Such a
tax would be governed by the relevant state tax legislation. This is
normally 1%,2%,4 or 5% &14%.
28. Excise Duty
It is a tax levied on those dutiable goods which are produced or
manufactured in india & has no relation with the sale of these goods.
Central VAT (CENVAT) is applicable to practically all manufactured
goods, so as to avoid cascading effect on duty.
Small Scale Sector is exempted from payment of excise duty from
annual production upto Rs.10 million.
Custom duty
It refers to the duty levied on the Import of the goods as well as on the
Export of the goods.
SERVICE TAX
1.1. What is Service Tax and who pays this tax?
29. Service tax is, as the name suggests, a tax on Services. It is a tax levied on the
transaction of certain services specified by the Central Government under the
Finance Act, 1994. It is an indirect tax (akin to Excise Duty or Sales Tax) which
means that normally, the service provider pays the tax and recovers the amount
from the recipient of taxable service.
1.2. Who is liable to pay service tax?
Normally, the 'person' who provides the taxable service on receipt of service
charges is responsible for paying the Service Tax to the Government (Sec.68 (1)
of the Act). However, in the following situations, the receiver of the Services is
responsible for the payment of Service tax:
(i) Where taxable services are provided by foreign service providers with no
establishment in India , the recipient of such services in India is liable to pay
Service Tax,;
(ii) For the services in relation to Insurance Auxiliary Service by an Insurance
Agent, the Service Tax is to be paid by the Insurance Company.
(iii) For the taxable services provided by a Goods Transport Agency for transport
of goods by road, the person who pays or is liable to pay freight is liable to pay
Service Tax, if the consignor or consignee falls under any of the seven categories
viz. (a) a factory (b) a company (c) a corporation (d) a society (e) a co-operative
society (f) a registered dealer of excisable goods (g) a body corporate or a
partnership firm.
(iv) For the taxable services provided by Mutual Fund Distributors in relation to
distribution of Mutual Fund the Service Tax is to be paid by the Mutual Fund or
the Asset Management Company receiving such service.
[Refer: Sec. 68(2) of the Act read with Rule 2(d) of the Service Tax Rules, 1994.]
1.3. Under what authority service tax is levied?
Vide Entry 97 of Schedule VII of the Constitution of India, the Central
Government levies service tax through Chapter V of the Finance Act, 1994. The
taxable services are defined in Section 65 of the Finance Act, 1994. Section 66 is
30. the charging section of the said Act.
1.4. What are the taxable services?
Taxable Services have been specified under Section 65(105) of the Finance Act, 1994.
All the taxable services as on 31.12.2008 are listed in Appendix-1. The list also shows
the relevant Accounting Heads required to be mentioned on the tax payment documents
(GAR-7), while depositing the Service Tax and other related dues in the banks1.5. How
to decide whether Service Tax is payable by a person?
A. If you are engaged in providing a service to your customer, please check:-
(i) Whether the service rendered by you is falling under the scope of any of the taxable
services listed in the Appendix-1.; and
(ii) Whether there is a general or specific exemption available for the category of service
provided under any notification issued under section 93 of the Finance Act, 1994.
(iii) Whether you are entitled to the value based exemption available for small service
providers under notification No.6/2005-ST dated 1.3.05 as amended from time to time.
Details are explained in para 8.1 of this Booklet.
(iv) Whether the service charges were received for the services provided or to be
provided.
In case the service provided by a person falls within the scope of the taxable services and
if such service is not fully exempted, the service tax is payable on the value of the taxable
service received, subject to the eligible abatements,
B. If you are availing the services of the service provider, please check:-
a. Whether the service received by you is falling under the scope of any of the services
where the recipient of the service is liable to pay Service Tax in terms of Section 68(2) of
the Act read with Rule 2(d) of the Service Tax Rules, 1994
b. In case the service received by recipients of such service is falling under the scope of
any of the taxable services defined under section 65 of the Finance Act, 1994, the
recipients of the service shall pay Service Tax after considering specific
exemptions/abatements admissible, if any.
c. Please note that the value based exemption for small scale service providers under
Notification No.6/2005 ST dated 01.03.2005 effective from 01.04.2005 is not admissible
to such recipients of taxable services.
1.6. What is the rate of Service Tax?
At present, the effective rate of Service Tax is 12.36% on the value of the taxable service.
The above effective rate comprises of Service Tax @12% payable on the "gross value of
taxable service", Education Cess @ 2% on the service tax amount, and Secondary and
Higher Education Cess @ 1% on the service tax amount.
1.7. What is meant by "value of taxable service"?
i. The "value of taxable service" means, the gross amount received by the service
provider for the taxable service provided or to be provided by him. Taxable value has to
be determined as per the provisions of the Section 67 of the Finance Act, 1994 read with
Service Tax (Determination of Value) Rules, 2006.
31. ii. For certain services, a specified percentage of abatement is allowed from the gross
amount collected for rendering the services (see Appendix -2) subject to the conditions,
inter alia, that CENVAT Credit has not been availed by the service provider and the
benefit under the Notification No.12/2003-ST dt. 20.6.2003 has also not been availed.
iii. There is also a composition scheme for 'works contract service', wherethe person
liable to pay service tax in relation to works contract service shall have the option to
discharge his service tax liability on the works contract service provided or to be
provided, instead of paying service tax at the rate specified in section 66 of the Act, by
paying an amount equivalent to 4% of the gross amount charged for the works contract.
The gross amount charged for the works contract shall not include Value Added Tax
(VAT) or sales tax, paid on transfer of property in goods involved in the execution of the
said works contract.
1.8. Can the Department modify the value determined by the service provider?
(i) The Central Excise Officer is empowered to verify the accuracy of any information
furnished or document presented for valuation.
(ii) If the value adopted by the Service Tax assessee is not acceptable in accordance with
the statute, the officer shall issue a show cause notice (SCN) proposing to determine the
value as per the law.
(iii) The SCN would be decided after providing reasonable opportunity of being heard to
the assessee.
(Rule 4 of the Service Tax (Determination of Value) Rules, 2006 read with Section 67 of
the Act)
1.9. What are the statutes governing the taxation relating to Service Tax?
The Statutes governing the levy of Service Tax are as follows:
(i) The Finance Act, 1994 -Chapter V -Section 64 to 96 I. (Also referred to as 'Act' in this
book). This chapter extends to the whole of India except the State of Jammu and
Kashmir.
(ii) The Finance Act, 2004 Chapter VI -for levy of Education Cess @ 2% on the Service
Tax.
(iii) The Finance Act, 2007 - for levy of secondary and Higher Education Cess of 1% on
service tax.
(iv) The Service Tax Rules, 1994. (Also referred to as 'Rules' or 'STR, 1994' in this
book).
(v) The CENVAT Credit Rules, 2004.
(vi) The Export of Service Rules, 2005.
(vii) The Service Tax (Registration of Special categories of persons) Rules, 2005.
(viii) The Taxation of Services (Provided from Outside India and Received in India)
Rules, 2006 (with effect from 19th April, 2006) - Notification No. 11/2006-ST dated
19.4.2006 as amended vide Notfn.No.31/2007 - ST dated 22.05.2007.
(ix) The Service Tax (Determination of Value) Rules, 2006 (with effect from 19th April,
2006) - Notification No. 12/2006-ST dated 19.4.2006 as amended vide Notfn.No.24/2006
- ST dated 27.06.2006 and Notfn.No.29/2007-ST, dated 22.05.2007.
(x) Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007
Notification No. 32/2007-Service Tax dated 22nd
May, 2007, as amended by Notification
No. 07/2008-St dated 1st
March, 2008.
32. 1.10. Is there any exemption from payment of service tax to Diplomatic Missions for
official use and individuals and their family members posted in a Diplomatic
Mission?
Yes, any taxable service provided to Diplomatic Missions for official use of such Mission
as well as for the personal use or for the use of the family members of diplomatic agents
or career consular officers posted in a foreign diplomatic mission or consular post in
India is exempt in terms of the notifications numbers 33/2007-ST dated 23rd
May, 2007
and 34/2007-ST dated 23rd
May, 2007 respectively.
2. Registration:
2.1. What is meant by "Registration"? Who should apply for registration under
Service Tax law?
In terms of Section 69 of the Finance Act,1994 (Chapter V) read with rule 4 of the
Service Tax Rules,1994-
� Every person who has provided a taxable service of value exceeding Rs. 9 lakhs, in
the preceding financial year, is required to register with the Central Excise or Service Tax
office having jurisdiction over the premises or office of such service provider.
� In case a recipient is liable to pay service tax (Please see question No. 1.2) he also has
to obtain registration.
� The 'Input Service Distributors' are also required to register them as per Notifi. No.
26/2005-ST dated 07.06.2005 as amended.
2.2. Why registration is necessary?
Registration is identification of an assessee. Identification is necessary to deposit service
tax, file returns and undertake various processes ordained by law relating to service tax.
Failure to obtain registration would attract penalty in terms of section 77 of the Finance
Act, 1994, read with rule 4 of Service Tax Rules 1994. (Please also refer to the answer to
Question No.2.15)
2.3. What is the meaning of an 'assessee' in relation to Service Tax?
As per the sub-section (7) of Section 65 of the Finance Act, 1994 (Chapter V), 'assessee'
means a person liable to pay Service Tax and includes his agent.
2.4. When should a prospective assessee obtain registration?
i. When a person commences business of providing a taxable service, he is required to
register himself within 30 days of such commencement of business[sub-rule (1) of Rule 4
of Service Tax Rules, 1994].
ii. In case service tax is extended to a new service, an existing service provider must
register himself, unless he is eligible for exemption under any notification, within a
period of 30 days from the date of new levy [sub-rule 5A of Rule 4 of the Service Tax
Rules, 1994].
2.5. What does the word "person" appearing in the definition of taxable service
mean?
The word "Person" shall include any company or association or body of individuals,
whether incorporated or not. Thus, this expression includes any individual, HUF,
proprietary firm or partnership firm, company, trust, institution, society etc.
2.6. What is the procedure for Registration? Who should be approached for Service
Tax Registration?
33. A prospective Service Tax assessee (service provider or service receiver) or 'Input
Service Distributor' seeking registration should file an application in Form ST-1 (in
duplicate) [prescribed vide Notifi.No. 32/2005 dated 20.10.2005 as amended Notifi. No.
11/2008 dated 1.3.2008] before the jurisdictional Central Excise/Service Tax officer. To
verify the correctness of declaration in the said form certain documents such as copy of
PAN card, proof of address of business premise(s), constitution of the business
[proprietorship, firm, company, trust, institute etc.] etc. may be required by the
registering authority. The copies may be self-certified by the applicant. In case of doubts
in select cases, original documents may have to be presented for verification.
2.7. How much time is taken for the issuance of the Registration Certificate?
The Registration certificate should be issued within a period of seven days from the date
of submission of application ST-1 along with all relevant details/documents.
In case the registration certificate is not issued within seven days, the registration applied
for is deemed to have been granted. [Rule 4(5) of the STR, 1994].
2.8. Is there any provision for centralized registration?
Service providers having centralized accounting or centralized billing system who are
located in one or more premises, at their option, may register such premises or office
from where centralized billing or centralized accounting systems are located and thus
have centralized registration.
Commissioner of Central Excise/Service Tax in whose jurisdiction centralized account or
billing office of the assessees exists, is empowered to grant centralized registration in
terms of Service Tax 4(2) and (3) of Service Tax Rules,1994.
2.9. In case of multiple services provided by an assessee, is separate registration
certificate required for each service?
As per sub-rule (4) of rule 4 of the Finance Act, 1994, only one Registration certificate is
to be taken even if the person provides more than one service from the same premises for
which registration is sought. However, while making application for registration all
taxable services provided by the person should be mentioned.
If there is centralized registration, only one registration certificate is required for services
provided from different premises, declared in the application for centralized registration.
2.10. What is to be done when the existing assessee starts providing a taxable service
not mentioned in the registration certificate? What is the process if the taxpayer
stops providing services from a registered premises of stops providing a taxable
service.
He should intimate the jurisdictional Central Excise officer in writing, furnishing the
name of taxable service he starts providing. No fresh documents are required for
verification by the officer unless there is change in any other details given in the original
or earlier application(s).
In case the changes relates to deletion of any premises or taxable service, the assessee
may file intimation on plain paper along with the copy of the registration certificate.
2.11. Is PAN allotted by the Income Tax Department a must for obtaining Service
Tax Registration?
Having PAN is essential because the Service Tax Code/Registration number is generated
based on the PAN issued by the Income Tax Department. The PAN based Service Tax
Code/ Registration number is a must for payment of service tax using the G.A.R. 7 Form.
2.12. What should be done with the Service Tax Registration on cessation of
34. business of providing taxable service -?
The Service Tax Registration certificate (ST-2) should be surrendered to the concerned
Central Excise / Service Tax authorities [Rule 4(7) of the STR, 1994].
2.13. What should be done with the Registration in case of transfer business to
another person?
In the event of transfer of the business, the transferee should obtain a fresh certificate of
Service Tax registration based on his own PAN [Rule 4(6) of the STR, 1994]. The
transferor should surrender his registration certificate, as mentioned in the answer to
Question No. 2.12.
2.14. Whether a service provider can make payment of Service Tax and file returns
before the grant of registration by the proper officer?
A person liable to pay service tax must apply for registration before he starts paying
service tax and filing of return Service provider should apply well in advance to obtain
registration, which is normally granted within 7 days of filing of application. If
registration is not granted within seven days, it deems to have been granted.
2.15. Is there any penal provision for non-registration?
Failure of registration may attract a penalty [Section 77(1)(a) of the Finance Act, 1994]
upto Rs.5000/-or Rs. 200/-for every day during which such failure continues, whichever
is higher.
However, such penalty may be waived in case the assessee proves that there was
reasonable cause for such failure [Section 80 of the Act].
2.16. What should be done in case of change in the office/place of business?
Any change in premises/office, as provided in Form ST-1, should be intimated to
jurisdictional Central Excise Officer.
2.17. If a registration certificate issued by the Department is lost, can duplicate be
issued? What is the procedure in this regard?
The assessee is required to make written request for 'duplicate' registration certificate.
The same will be issued by the Department after suitable entry in the registers/records of
the Office.
3. Payment of Service Tax
3.1. How to pay Service Tax?
Form G.A.R.7 (previously known as TR6 Challan) should be used to make service tax
payments. Payment of service tax may be made at the specified branches of the
designated banks. The details of such Banks and branches may be obtained from the
nearest Central Excise Office/Service Tax Office.
Service Tax can also be paid electronically, using e-payment facility. (Please refer para
3.16 to 3.25).
3.2. When is Service Tax required to be paid?
1. Payments through Bank:
Category Frequency Due Dates
In case of
Individuals,
Proprietary
Firms &
Partnership
Quarterly as mentioned
below ( i ) For Q.E.
30th June (ii ) For Q.E.
30th Sept. ( iii ) For
Q.E. 31St Dec.
-by 5th July
-by 5th Oct
-by 5th Jan.
-by 31st March
35. Firms ( iv ) For Q.E. 31st
March
Others (e.g.
Companies,
Societies, Trusts
etc.)
Monthly By 5th of the month immediately following
the month in which payments are received
towards the value of taxable services.
However, in case of March, the payment
should be made before 31st March.
2. Electronic Payments through Internet:
Category Frequency Due Dates
In case of
Individuals,
Proprietary Firms
& Partnership
Firms
Quarterly as
mentioned
below
( i ) For Q.E.
30th June
( ii ) For Q.E.
30th Sept.
( iii ) For Q.E.
31St Dec.
( iv ) For Q.E.
31st March
-by 6th July
-by 6th Oct
-by 6th Jan.
-by 31st March.
Others (e.g.
Companies,
Societies, Trusts
etc.)
Monthly By 6th of the month immediately following the
month in which payments are received towards the
value of taxable services. However, in case of
March, the payment should be made before 31st
March.
Exemptions under Service Tax
Services exempted from Service Tax:
Some general exemptions are provided in respect of:
• Services provided to the United Nations;
• Services to units in and developers of Special Economic Zones;
• Services rendered free of cost; and
• Services prior to the effective date of the service being included as a taxable
service, even if payments are realized later.
Exemptions available for small service providers:
Service Tax is fully exempted in respect of the taxable services of aggregate value not
exceeding eight lakhs rupees in any financial year.
36. The above-mentioned exemption based on the turnover is not available to the persons
who are liable to pay Service Tax but are not the service providers. For example:
1. The recipient of services from an overseas service provider who has no registered
office in India
2. A company incurring the Transportation charges for availing the services from
Goods Transport Agencies, for transportation of goods by Road.
3. Whether the service charges were received for the services provided or to be
provided.
In case the service provided by a person falls within the scope of the taxable services and
if such service is not fully exempted, the service tax is payable on the value of the taxable
service received subject to the eligible abatements, if any.
Form ST – 1
[Application form for registration under Section 69 of the Finance Act, 1994 (32 of 1994)]
(Please tick appropriate box below)
New RegistrationNew Registration
AmendmentsAmendments to information declared by the existing Registrant.to information declared by the existing Registrant.
Registration Number in case of existing Registrant seeking Amendment
_____________
1. (a) Name of applicant
(b) Address of the applicant
2. Details of Permanent Account Number (PAN) of the applicant
37. (a) Whether PAN has been issued by the Income Tax Department
Yes No
(b) If Yes, the PAN
(c) Name of the applicant (as appearing in PAN)
3. (a) Constitution of applicant (Tick as applicable)
(i) Proprietorship
(ii) Partnership
(iii) Registered Public Limited Company
(iv) Registered Private Limited Company
(v) Registered Trust
(vi) Society/Cooperative society
(vii) Others
(b) Name, Address and Phone Number of Proprietor/Partner/Director
(i) Name
38. (ii) Address
(iii) Phone Number
4. Category of Registrant (Please tick appropriate box)
(a) Person liable to pay service tax
(i) Service provider
(ii) Service recipient
(b) Other person/class of persons
(i) Input service distributor
(ii) Any provider of taxable service whose aggregate value of taxable service in a
financial year exceeds three lakh rupees
5. (a) Nature of Registration (Tick as applicable)
(i) Registration of a single premise
(ii) Centralized Registration for more than one premises
(b) Address of Premises for which Registration is sought
(i) Name of Premises / Building
39. (ii) Flat/Door/Block No.
(iii) Road/Street/Lane
(iv) Village / Area / Lane
(v) Block/Taluk/Sub-Division/Town
(vi) Post office
(vii)City/District
(viii)State/Union Territory
(ix) PIN
(x) Telephone Nos.:
(xi) Fax No.
(xii)E-mail Address
(c) In case of application for Centralized Registration, furnish address of all the premises
from where taxable services are provided or intended to be provided (FORMAT AS PER
5(b) ABOVE)
40. (d) In case of application for Input Service Distributor, furnish address of all the premises
to which credit of input services is distributed or intended to be distributed (FORMAT AS
PER 5(b) ABOVE)
6. Address of the premises or office paying service tax under centralised billing or
centralised accounting under sub-rule (2) and (3A) of rule 4 of the Service Tax Rules,
1994.
Address
7. Description of taxable services provided or to be provided by applicant
S.No. Description of service Relevant clause of section 65 of the Finance Act, 1994, to be
indicated, if possible
(1) (2) (3)
8. Name, Designation and Address of the Authorized Signatory /Signatories:
Declared Service
In the definition of ‘service’ contained in clause (44) of section 65B of
the Act it has also been stated that service includes a declared service.
The phrase ‘declared service’ is also defined in the said section as an
activity carried out by a person for another for consideration and
specified in section 66E of the Act. The following nine activities have
been specified in section 66E:
1. renting of immovable property;
2. construction of a complex, building, civil structure or a part
thereof, including a complex or building intended for sale to a buyer,
wholly or partly, except where the entire consideration is received
after issuance of certificate of completion by a competent authority;
3. temporary transfer or permitting the use or enjoyment of any
intellectual property right;
41. 4. development, design, programming, customization, adaptation, up
gradation, enhancement, implementation of information technology
software;
5. agreeing to the obligation to refrain from an act, or to tolerate an
act or a situation, or to do an act;
6. transfer of goods by way of hiring, leasing, licensing or any such
manner without transfer of right to use such goods;
7. activities in relation to delivery of goods on hire purchase or any
system of payment by instalments;
8. service portion in execution of a works contract;
9. service portion in an activity wherein goods, being food or any
other article of human consumption or any drink (whether or not
intoxicating) is supplied in any manner as part of the activity.
The above activities when carried out by a person for another for
consideration would amount to provision of service. Most of these
services are presently also being taxed except in so far as Sl. No.5 is
concerned. It is clarified that they are amply covered by the definition
of service but have been declared with a view to remove any
ambiguity for the purpose of uniform application of law all over the
country.
Service Tax – Negative List
In the negative list system all services are taxable and only those
services that are mentioned under negative list are exempted. Earlier all
services were exempt from service tax except those specifically mentioned
in the act. So basically it is the other way round now. The negative list is
mentioned in Finance Act 2012. Relevant extracts of the same are given
below (see also the highlighted portion). However the Finance Act did not
mention the date of implementation of the same, which was notified through
Notification No. 19 /2012-Service Tax dated June 05, 2012. Extracts from
Clause 143- Section 66D (34) Negative list of services. "Negative list"
means the services which are listed in section 66D;
The negative list shall comprise of the following services, namely:-
42. (a) services by Government or a local authority excluding the following
services to the extent they are not covered elsewhere-
(i) services by the Department of Posts by way of speed post, express parcel
post, life insurance and agency services provided to a person other than
Government;
(ii) services in relation to an aircraft or a vessel, inside or outside the
precincts of a port or an airport;
(iii) transport of goods or passengers; or
(iv) support services, other than services covered under clauses
(i) to (iii) above, provided to business entities;
(b) services by the Reserve Bank of India;
(c) services by a foreign diplomatic mission located in India;
(d) services relating to agriculture or agricultural produce by way of-
(i) agricultural operations directly related to production of any agricultural
produce including cultivation, harvesting, threshing, plant protection or seed
testing;
(ii) supply of farm labour;
(iii) processes carried out at an agricultural farm including tending, pruning,
cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating,
curing, sorting, grading, cooling or bulk packaging and such like operations
which do not alter the essential characteristics of agricultural produce but
make it only marketable for the primary market; (iv) renting or leasing of
agro machinery or vacant land with or without a structure incidental to its
use;
(v) loading, unloading, packing, storage or warehousing of agricultural
produce;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board
43. or services provided by a commission agent for sale or purchase of
agricultural produce;
(e) trading of goods;
(f) any process amounting to manufacture or production of goods;
(g) selling of space or time slots for advertisements other than
advertisements broadcast by radio or television;
(h) service by way of access to a road or a bridge on payment of toll
charges;
(i) betting, gambling or lottery;
(j) admission to entertainment events or access to amusement facilities;
(k) transmission or distribution of electricity by an electricity transmission
or distribution utility;
(l) services by way of-
(i) pre-school education and education up to higher secondary school or
equivalent;
(ii) education as a part of a curriculum for obtaining a qualification
recognised by any law for the time being in force;
(iii) education as a part of an approved vocational education course; (m)
services by way of renting of residential dwelling for use as residence; (n)
services by way of-
(i) extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount;
(ii) inter se sale or purchase of foreign currency amongst banks or
authorised dealers of foreign exchange or amongst banks and such
dealers;
(o) service of transportation of passengers, with or without accompanied
belongings, by- (i) a stage carriage;
44. (ii) railways in a class other than-
(A) first class; or
(B) an airconditioned coach;
(iii) metro, monorail or tramway;
(iv) inland waterways;
(v) public transport, other than predominantly for tourism purpose, in a
vessel between places located in India; and
(vi) metered cabs, radio taxis or auto rickshaws;
(p) services by way of transportation of goods-
(i) by road except the services of-
(A) a goods transportation agency; or
(B) a courier agency;
(ii) by an aircraft or a vessel from a place outside India to the first customs
station of landing in India; or
(iii) by inland waterways;
(q) funeral, burial, crematorium or mortuary services including
transportation of the deceased.
Filling of Returns
Service Tax is a form of indirect tax imposed on specified services called
“Taxable Services”. In the ST-Returns module of the ACES (Automation of
Central Excise and Service tax), filing of returns and the subsequent
processing of returns is handled through a centralized computing
environment. Online filing of Returns includes certain screens that are
presented to the Assessee.
45. It also contains the validations that are performed by the system while the
Assessee is filling up the return. These validations include checking
correctness of arithmetic computation. The Assessee registered with Service
Tax (An application filed in Form ST -1 and the Form ST-2 issued by the
jurisdictional Service Tax Officer after verification of the particulars) and
having a certificate can access the online facility to file his returns in the
centralized system.
The Assessee can file returns (Form ST-3) and submit the same to the
system. At the time of submission, the system performs some checks and
validations (some of the validations like entering data as per the correct data
type and calculation accuracy are checked by the system as the Assessee fills
in the form) and reports the errors to the Assessee. The Assessee can correct
these while submitting it finally.
2.1 Description The registered Assessee can access the ACES application
with their user ID and password. The Assessee can file ST3 return as a
Service Provider, Service Recipient or Input Service Distributor.
The Assessee can file returns for one or more than one service offered by
one premises and for more than one premises as well. Returns are filed once
in six months – for the half-year starting from the 1st of April through the
30th of September, the returns are to be filed by the 25th of October and for
the half-year starting from the 1st of October through the 31st of March
returns are to be filed by the 25th of April.
2.2 Navigational Path The Form ST-3 can be accessed by the Assessee after
he has logged in successfully into the system, through the RET menu item;
here RET is the label for returns menu.
In the RET menu the Assessee will click on the Fill sub -menu option of the
Fill ST3 menu option. As soon as he clicks on the same the system will
populate the ST3 form. The navigation path for the ST-3 form is: Logged in
Assessee à RET à Fill ST3 à Fill Figure –
2.1: Navigation on the RET Menu 2.3 Attachments There are no attachments
required to fill ST-3 Returns.
46. Approval Flow
There is no approval flow in filing of Service Tax returns.
Operating Instructions
The process goes through the following steps –
1. The system displays the form with a list of premises that have been
registered
47. by the Assessee. The Assessee can file returns for some or all of the
premises at one time.
2. The Assessee is allowed to choose a premises code (he can choose one
code only at a time) and file returns for this premises:
a. Once the Assessee is through with entering all details pertaining to the
service tax liability, duty defrayed using cash and credit, arrears, interest,
penalty and other amounts paid, provisional assessments payments made or
received by way of refund, for the premises selected he can choose to file
returns for another premises.
b. If the Assessee chooses to file returns for other premises, details of the
return filed already filed are stored and a fresh screen of an ST-3 form is
shown to the Assessee. This screen has a list of premises and the premises
for which returns have already been filed.
c. If the Assessee does not have any other registered premises or if he wishes
to file returns for other registered premises at a later point of time, the details
of the return filed for the premises code selected by the Assessee are stored.
3. After selecting a premises code, the Assessee, service tax category wise,
can file the return for the premises. For selecting services, there is a Search
button which opens up a new popup window containing list of all services
from where Assessee can select multiple services. In case the Assessee has
started providing new services from the same premises af ter his registration,
he would be able to file returns for this service as well by adding the service
to his returns form. The Taxable Service selected should be valid for the
period for which return is being filed. If the Assessee is an Input Service
Distributor only, he will not be able to select services. He will only enter
details of CENVAT Credit Distributed, Name and Place and can save or
submit the return.
4. The Assessee fills his returns, minor head-wise. In other words – he fills a
return for each of the service that he is providing.
48. 5. The Assessee files details of the gross amount received, abatement
amount claimed, value on which service tax is payable, gross amount for
which bills/ invoices/ Challans are issued.
6. The system computes the service tax payable.
7. For each service liability, the system computes the education cess
applicable, Secondary and Higher Education cess payable for the Assessee
for that particular return and shows it to the Assessee.
8. Once the Assessee has filled in all details pertaining to the first category
of service, the system shows the page pertaining to next service.
9. The Assessee can indicate the amount that he is paying in cash and
through input credit.
10. The Assessee then enters similar details for other months as the case is
that fall within the return filing period.
11. The Assessee would have already deposited a certain amount of cash
through GAR-7 challan under the minor head code 00440297 – the serial
code for education cess in the service tax major head. The amount tha t the
Assessee enters in his return as paid through cash towards defrayal of
education cess liability should be equal to the amount deposited vide the
GAR-7 challan for the same purpose.
12. The credit on education cess on excisable goods and services can be
utilized only for the payment of education cess through credit.
13. Next the Assessee can enter details of other payments – viz., arrears,
interest, penalties and miscellaneous.
14. The Assessee is required to give details of the Challan Identification
Numbers (CIN) for each month/ quarter against which he has made the duty
payments.
15. It is worth mentioning that the arrears are required to have a source
document number against them. As stated earlier, these arrears figure in this
49. particular field only when sub-section 1 of section 73 has been duly applied
on the returns of the Assessee. Furthermore these arrears are a consolidated
figure – more accurately, they indicate a duty liability that had been
determined under sub-section 2 of section 73 of the Finance Act. This figure
of liability can subsume multiple minor heads as it is contingent upon the
view with which the show-cause notice was passed. The Assessee will enter
Source Document details for all such amount paid through arrears.
16. Next the Assessee enters details of the credit he has availed, utilized and
(if applicable) passed on.
17. The Assessee will mention CENVAT Credit by entering details of
Opening Balance for the first month, Credit taken, and Credit Utilized. The
system will compute the “Total credit taken” , “Total credit utilized”,”
Closing Balance” and the “Opening Balance” for the subsequent months of
the filing period.
18. If the Assessee is an Input Service Distributor, he can enter the Details of
CENVAT Credit Distributed. The Assessee will enter details of Opening
Balance for the first month, Credit taken, and Credit Distributed. The system
will compute the Closing Balance and the Opening Balance for the
subsequent months of the filing period
Appeals before the Commissioner (Appeals)
1. In this E-book, attempts have been made to explain about filing of
Appeals before the Commissioner (Appeals) in Central Excise, Customs &
Service Tax. It is expected that it will help departmental officers in their day
to day work.
2. Though all efforts have been made to make this document error free, but it
is possible that some errors might have crept into the document. If you
notice any errors, the same may be brought to the notice to the NACEN,
RTI, Kanpur on the Email
addresses: rtinacenkanpur@yahoo.co.in or goyalcp@hotmail.com. This may
not be a
perfect E-book. If you have any suggestion to improve this book, you are
50. requested to
forward the same to us.
3. This e-book has been prepared with active assistance and contribution by
Shri Sanjay Kumar Agarwal, Superintendent, Commissionerate of Central
Excise,Lucknow and Shri S.A. Khan, Assistant Director, NACEN, RTI,
Kanpur. Iappreciate their participation and willingness to prepare e-books
and to help fellow departmental officers in capacity building and upgrading
their knowledge.
4. If any other officer is interested in preparing E-book on any topic relating
to Customs, Central Excise or Service Tax, he may forward the E-book
prepared by him tothe Email addresses mentioned above. After necessary
vetting, we will include the samein our E-book library for benefit of all
Departmental officers and name of the officerwho has prepared the book
will be duly acknowledged.
5. If you feel that this e-book has really helped you in improving your
knowledge orunderstanding of the subject matter, we request you to take few
minutes out of yourprecious time and provide us your valuable feedback.
Your feedback is important and will help us in improving our e-books.
51. CONCLUSION
1.Bhilai steel plant is the highest Tax payer in Chhattisgarh.
2.Following Taxes are paid by bhilai steel Plant
(a) C.S.T.
(b) VAT
(c)Central Excise duty.
(d)Custom duty
(e)Entry and Internal
(f)Service tax
VAT would change the nature of trade in the coming years, but the
medium level of trade that is C&F agents, distributors, stockiest etc. would
face problems as the companies would reduced the tier of marketing.
Similarly small retail dealers would be required to maintained more accounts
or pay composition money which cannot be collected from the customers.
Goods and Services Tax (GST) is a part of the proposed tax reforms that
center round evolving an efficient and harmonized consumption tax system
in the country. Presently, there are parallel systems of indirect taxation at the
central and state levels. Each of the systems needs to be reformed to
eventually harmonize.
In the Union Budget for the year 2006-2007, Finance Minister proposed
that India should move towards national level Goods and Services Tax that
should be shared between the Centre and the States. He proposed to set April
1, 2011 as the date for introducing GST. World over, goods and services
attract the same rate of tax. That is the foundation of a GST. The first step
towards introducing GST is to progressively converge the service tax rate
and the CENVAT rate.
So overall B.S.P. Pays near about 1.5 crores of service tax annually.
Service tax paid by B.S.P. covers the areas like maître garden services,
cleaning staff, security services.
Exempted services under B.S.P. are hospital sectors, steel clubs.
52. BIBLIOGRAPHY
The above report has been repaired from the following sources of data
and information:
Website:
www.Google.com
www.sail.co.in
www.steelindia.com
www.wordsteel.com
www.wikipedia.org
Books:
Indirect Taxes-H.C Mehrotra & V.P AGRAWAL
References:
Information collected from Bhilai Steel Plant
SAIL
